EMERGING MARKETS-Commodity-linked Latam FX gains, Brazil's real lags

* Mexican peso leads gains * Brazil's real falls as economic outlook worsens By Ambar Warrick April 19 (Reuters) - Commodity-related Latin American currencies rose on Monday as increasing hopes of a global economic recovery pushed up metal and oil prices, but gains were limited as surging COVID-19 deaths and infections in the region dented sentiment. Mexico's peso and Colombia's peso gained as oil added to gains made last week. Positive economic data from the United States and China had boosted optimism. The Mexican peso outpaced its peers in early trade amid growing bets that the country's proximity to the United States will help it benefit from an economic bounce-back in its northern neighbor. Chile's peso rose on strength in copper prices, which neared 10-year highs. But rising COVID-19 infections across Latin America held back gains, with most currencies lagging their emerging market peers this year due to their economies taking larger hits from the pandemic. Brazil's real fell 0.4%, as data showed economic activity surged in February. But the reading was before a damaging second wave of infections hit the country. The country has faced record-high infection and death rates ever since, and is currently the third worst struck by the pandemic, behind India and the United States. The Brazilian government's handling of the pandemic also drew much criticism, and has resulted in a congressional investigation of President Jair Bolsonaro's response to the outbreak. Brazil's 2022 inflation outlook rose above the central bank's target, while the growth outlook for this year fell for a seventh consecutive week. "Rising inflation, deterioration of consumer and business confidence, and increasing restrictions on activity and mobility due to the intensification of the COVID outbreak are expected to weaken the growth momentum in March-April, likely leading to a contraction of real activity in Q2 2021," Goldman Sachs analysts wrote in a note. "We expect activity to strengthen visibly during 2H2021 in tandem with the advancement of the Covid vaccination program and renewed fiscal stimulus which is expected to be only partially offset by rising rates and lingering political noise and policy uncertainty." Latam stocks were flat in early trade, but lagged the record highs seen in their global peers. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1349.42 0.05 MSCI LatAm 2403.23 -0.08 Brazil Bovespa 121074.91 -0.03 Mexico IPC 48581.38 -0.3 Chile IPSA 4992.74 0.09 Argentina MerVal 0.00 0 Colombia COLCAP 1314.47 -0.2 Currencies Latest Daily % change Brazil real 5.6046 -0.36 Mexico peso 19.8528 0.31 Chile peso 700.7 0.46 Colombia peso 3596.6 0.15 Peru sol 3.633 -0.01 Argentina peso 92.9200 -0.12 (interbank) (Reporting by Ambar Warrick in Bengaluru; editing by Jonathan Oatis)